Final answer:
The statement that the term "hedonic consumption" pertains to the personal gratification consumers associate with a product or service is True. It ties in with the law of diminishing marginal utility, indicating that while consumption can increase total utility, the additional satisfaction from each unit decreases over time.
Step-by-step explanation:
The term "hedonic consumption" refers to the notion that consumers derive personal gratification, pleasure, or utility from the products or services they purchase. This concept is inherently linked to the economic analysis of household behavior, which assumes that individuals are constantly seeking to maximize their utility or satisfaction. Under this framework, utility is subjective and varies across different individuals, where each person is the sole judge of what brings them satisfaction.
To further understand hedonic consumption, it is embedded in an important concept in economics known as the law of diminishing marginal utility. This law proposes that while greater overall consumption can lead to higher total utility, the utility gain from consuming each additional unit diminishes over time. For instance, the pleasure a person gets from their first slice of pizza is typically higher than the utility derived from subsequent slices. This is because as we consume more of something, each additional piece offers less incremental satisfaction than the previous one, illustrating diminishing marginal utility.
Therefore, the assertion that hedonic consumption is about the personal gratification consumers associate with the product or service is True.